Natural Gas Price Outlook – Natural Gas Continues to Struggle

Natural Gas Technical Analysis

The Natural gas has been a little bit negative in the early hours on Wednesday, as we continue to see a lot of back and forth and choppy behavior right around the $3 level, the $3 level of course is a large round psychologically significant figure that people will be paying close attention to as it does attract a lot of options traders. And previously, it had been both a support and a resistance level. So ultimately, I think this is an area that’s like a magnet for price. Keep in mind that this time of year is typically very negative as we continue to look at the lack of heating demand as a big problem for natural gas. Furthermore, though, it looks like the US economy might be starting to slow a bit.

So, this course raises the question of whether or not there will be a lot of demand for natural gas. Regardless, at this point, when we are looking at this, the 50-day EMA is getting ready to cross below the 200-day EMA, which kicks off the so-called death cross, and that is a negative turn of events. With that being the case, I think that you are going to see rallies sold into, especially considering that these are diverging, at the previous uptrend line. While I do think natural gas eventually gets closer to the $5 level again, we are months away from that. We are not in the right time of year to see massive spikes in natural gas, barring some type of external headline, obviously. But as things stand right now, I think we’re just going to test this support level and rallies I look forward to shorting at the first signs of exhaustion.

It’s a short-term trading type of environment right now, but if we were to break down below the $2.85 level, then we could drop as low as $2.30. I think that would be like a big flush lower. I remain bearish in natural gas, but I also recognize that there isn’t a whole lot of momentum typically in the month of August, barring either external factors or some type of massive heat wave, which is possible, but even that will be temporary.

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